Hiring the right talent and retaining them can be costly for business when you think about the time and money spent looking for that ‘perfect’ candidate.

If you pick wrong, it can hurt your company severely; but if you pick right, it’s an investment that will definitely benefit you in the long run.

Since many Small and Medium Enterprises (SMEs) like us work on tight margins, it is crucial for us to always look for ways to reduce our manpower costs – without compromising on the quality of our staff or staff benefits.

We spoke to two local SMEs to find out how they found and kept the best people, while keeping hiring costs low.

1. IFS Capital

Image Credit: IFS Capital Limited

According to IFS Capital, the company spends about $10,000 a year on recruitment.

“We used to hire recruitment agencies to help us get the right candidates, but they are very costly. To save cost, we decided to do the recruiting in-house,” said Patrick Chew, Head, HR & Admin of IFS Capital.

The company also has an internal referral programme to encourage staff to recommend their friends or contacts for the vacancies available.

Other than this, the company also regularly posts the vacancies on quite a few job portals including JobsBank.

When looking out for a potential employee, Chew said that the company looks for an individual that best fits the job requirements.

Conversely, one of the key factors a potential candidate looks for in a new role is the salary.

“Salaries are based on the skillsets of the candidates and their contribution to the growth of the company,” said Chew.

“We will offer salaries according to the market value and what the potential employee can contribute to the organisation.”

He added that beyond salaries, IFS encourages new employees to look at longer-term rewards as they want them to “grow with the company”.

As salary cost is the biggest expense for the company, they have leveraged on WSG’s Career Support Programme (CSP) for salary support, which has helped IFS Capital substantially to hire talent which they may not have been able to afford.

Under this programme, employers can receive salary support of up to a maximum of 18 months for every eligible Singapore citizen Professionals, Managers, Executives and Technicians (PMETs) hired.

What this does is help defray a portion of their salary to allow employers to tap on the pool of experienced and skilled PMETs.

There’s a higher wage support for mature PMETs, and besides helping to reduce hiring costs, mature PMETs benefit companies more in that they are more experienced.

Commenting more on reducing hiring costs, he added that since the employee turnover can adversely impact on the company’s business, IFS is continually evaluating on how to retain their employees.

”We are currently looking at flexi-benefits to cater different segments of the employees in the company,” said Chew.

“Most importantly, we ensure that the working environment is favourable. We adopt and practice the principles of meritocracy, transparency, and respect for the individual.”

“Employees are our company’s most important asset, hence recruiting and retaining the employee is of utmost importance.”

2. Eligo Pte Ltd

Image Credit: Eligo Pte Ltd

According to Wee Kok Seng, Managing Director of Eligo Pte Ltd, there are several factors that contribute to the manpower crunch in Singapore.

One reason in particular, is that the rising salary costs do not commensurate with productivity gains.

“Singaporeans have enjoyed many years of prosperity and relatively high wages and this has made us become complacent,” said Wee.

“Most of us are sadly too comfortable, or too used to our comfort zones to be aware of the urgency to skill up, [or] to be more economically viable than the workforce in China and India.”

To make matters worse, Wee said that those who spent many years in industries that are now getting obsolete would have high last-drawn salaries coupled with job experiences, but they are beginning to be irrelevant.

The CSP has helped such displaced workers bridge the gap between their last drawn salary and their current market value.

Beyond offering salary support, he added that CSP has also helped employers to take risk with individuals that they would otherwise find it difficult to hire.

Wee recounted one particular employee who had been out of job for an extended period of time:

“He neither had the exposure to our industry nor the relevant education background, but he was very enthusiastic about the role and was willing to learn on the job.”

“We took a chance with him and with the help of CSP salary support, our financial risk in hiring was lowered.”

“He was very thankful to us for granting him a career opportunity and he worked hard in picking up new skills. He also integrated well into the organisation, and is now part of the contribution to our company’s success.”

For its new employees, Eligo also recently implemented Work Trial for its new employees.

Getting them to try out the job before an actual job offer will help both the company and jobseeker ‘test water’ and see if there is a job fit.

In the long run, this helps to reduce employee turnover.

“Ensuring they fit into our organisational culture, work ethos, and expectations is critical,” said Wee.

Sometimes Retention Is Better Than Hiring

In order to find a good match for vacant positions, companies must offer competitive salaries.

To offset a higher salary, companies can take advantage of CSP, which offers up to $42,000 salary support to hire mature and experience Singaporean professionals.

At the end of the day, SMEs have very limited budget to work with and they should tap into the various programmes and initiatives offered by Workforce Singapore to help them manage their talent needs and be competitive.